DBS Group Holdings Ltd slashed chief executive officer Piyush Gupta’s compensation by S$4.1 million (US$3 million) after the lender suffered a series of digital banking outages last year and was reprimanded by the central bank.
The pay cut, announced on Wednesday alongside DBS earnings, represents a 30 percent reduction in variable pay for Gupta, one of the highest-paid executives in the country, who earned S$15.4 million in total in 2022. Last year’s outages that saw payment and ATM transactions stalled across the city-state also resulted in the variable compensation for the group management committee collectively cut by 21 percent from a year earlier.
“We’ve taken accountability,” Gupta said at an earnings briefing. “I think that’s a good element of governance.”
Photo: Bloomberg
The pay fallout came even though DBS’ full-year results hit a record. The bank’s net profit last year exceeded S$10 billion, a target it had set for itself for the medium term. It posted return on equity of 18 percent.
In the three months ended Dec. 31, net profit, excluding one-time items, rose 2 percent to S$2.39 billion, Singapore’s biggest lender said in a statement yesterday. This compares to the S$2.44 billion average estimate by analysts surveyed by Bloomberg News.
DBS also proposed a bonus share issue and raised its final dividend, saying it saw opportunities to return more to shareholders this year.
“The heavy punishing move highlights the management’s commitment to minimize future disruptions,” IG Asia Pte market analyst Yeap Jun Rong (葉俊榮) wrote in a note. Yeap added that DBS’ level of dividend yield towers above its peers.
In November last year, the Monetary Authority of Singapore banned DBS from acquiring new business ventures and reducing local branch and ATM networks for six months after a spate of digital banking service outages.
The actions followed repeated and prolonged disruptions of DBS’ online banking services last year, prompting Gupta to apologize to customers and assure them the bank is addressing the issues “with utmost priority.”
DBS said yesterday customers can expect greater service reliability, as well as alternative channels for payments and inquiries should issues happen.
Under Gupta’s leadership since November 2009, DBS has expanded operations in India, Taiwan and China through acquisitions and organic growth. He has also beefed up the bank’s wealth management business, which is now one of the largest in Asia in terms of assets under management.
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